STANDARD Life has revealed a fall in new business as sales of its corporate schemes were hit by companies putting their plans on hold ahead of a shake-up in pension provision.
The life and pensions giant said corporate pension sales tumbled 38 per cent to £635 million in the three months to 30 September, but insisted it was well placed to benefit from the changing regulatory landscape.
Chief financial officer Jackie Hunt told The Scotsman that the figures had suffered in comparison to “incredibly strong” corporate pensions sales at the first-half stage last year, but the group was well placed to pick up more business through auto-enrolment, which will force employers to offer workplace pensions to eligible members of staff.
She said: “The pipeline in terms of enquiries is strong, but there’s about a six-month lead time between people signing up and it coming into our sales numbers.”
The Edinburgh-based firm runs 35,000 corporate pension schemes and expects to add around 400,000 savers to those through auto-enrolment. Hunt said: “The bigger opportunity is the potential for new scheme wins.”
Overall, the group reported new business sales of £14.4 billion for the nine months to 30 September, down from £15.5bn at the start of the year, although the decrease was in line with analysts’ forecasts.
Hunt said: “The stand-out performance for the quarter has to be Standard Life Investments, where we saw over £2.6bn of inflows in the third quarter itself. That obviously supported the growth in assets under management, as has positive market movements.”
She also highlighted a rise in sales at the firm’s Canadian business, where net inflows soared 56 per cent to £612 m.
Assets under management rose to £211.9bn, from £198.4bn previously, and chief executive David Nish said the group was ready to take advantage of other changes such as the retail distribution review (RDR), which will ban commission payments to financial advisers from the start of next year.
Investec analyst Kevin Ryan said the new business numbers “look reasonable” given the headwinds of recession and upcoming regulatory changes, but noted that a 12 per cent decline in nine-month UK sales to £9.7bn was worse than forecast.
However, he said there were “plenty of reasons” to remain positive about the firm’s shares, which have risen strongly this year, as it is one of the insurers best prepared for RDR, because it stopped paying commission when it floated in 2006.
• Wealth manager St James’s Place, 60 per cent owned by Lloyds Banking Group, has reported an 8 per cent rise in new business to £165.6m for the three months to 30 September and said its funds under management had grown by 15 per cent to £32.8bn this year.
Chief executive David Bellamy said: “During recent months world stock markets have proved less volatile and this has helped to drive an improvement in the confidence of retail investors, evidenced by the strong growth in new business during September and October.”